Shares of India’s digital payments firm Paytm fell 6.2% on Friday, hit by a proxy advisory firm’s objection to the re-appointment of its chief executive and central bank guidelines for digital lending applications.
The Institutional Investor Advisory Service said it opposes the re-appointment of Vijay Shekhar Sharma as CEO and chief executive officer at next week’s annual meeting.
“Vijay Shekhar Sharma has made a number of commitments in the past to make the company profitable, however, these commitments have not worked. We believe the board should consider professionalizing leadership,” IIAS said in a report August 9.
PaytmParent company One97 Communications, backed by China’s Alibaba Group Holding and its subsidiary Ant Group, posted a loss of Rs. 644 crore for the June quarter last week, but said it is on track to reach operating profit by September 2023.
IIAS also raised concerns that Sharma’s overall remuneration, estimated at Rs. 796 crore for fiscal year 2023, higher than that of the CEOs of all S&P BSE Sensex companies, most of which are profitable.
Adding to its problems, Paytm told investors on Thursday that the central bank’s latest guidelines on increasing scrutiny of digital lending applications could affect their buy now pay later business.
“In the interim, we believe Paytm loan business disbursement growth may take a hit,” Macquarie analysts wrote in a note.
Separately, Paytm said macroeconomic challenges could lead to its growth “mildly”. The company announced a nearly 300% increase in loan disbursements in July.
© Thomson Reuters 2022
